I've been hearing "the ink was all but signed" on Iowa Pacific Holdings (IPH) selling the Texas & New Mexico and West Texas & Lubbock properties to Watco. Apparently, Watco has announced the purchase on their Facebook feed this morning. These lines are in the booming Permian Basin oil region, so this is a potentially strong move for Watco gaining operations moving crude.

However, it also represents IPH selling off its two most profitable properties, by all accounts I have seen. This move will leave IPH as predominantly a passenger train operator, with the company portfolio consisting of shortlines with light freight operations and tourist trains, and passenger trains operated over Class 1 mainlines as special service. IPH is also close to finalizing plans to operate the Hoosier Service between Chicago and Indianapolis.

The Chicago Terminal RR will be the only all-freight operation left in the IPH portfolio.

It will be interesting to see how this ultimately turns out. Tourist lines and passenger trains are not generally viewed as the route to big profits, but the question is whether IPH has identified just enough of a niche market for long-term success.